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If your store is filled with percent-off signs this holiday
season, you might not be pricing effectively, says Tom Shay, retail
specialist and principal of Profits Plus in St. Petersburg, Florida.
"Independent retailers need to know their margins to master
higher sales volumes," he says. Tactics Shay teaches to
clients include:

Don't
"BOGO." "Buy one get one free"
promotions can backfire, cautions Shay. "With independents,
customers know that it's the owner making pricing decisions and
not a corporate entity, so they'll argue for 50 percent off one
item and hope you give in," he says. Instead, use longer-term
loyalty programs, such as punch cards that entitle customers to a
benefit after 10 purchases. These inspire greater sales volumes
while short-circuiting requests for individual discounts.

Benefit from loss
leaders. Promote popular items that are well-priced, even if
it costs you something. "If you're selling a gallon of
milk for a dollar more than everyone else, then people are going to
assume you're more expensive on everything," says Shay.
"Sometimes, you need to take a loss on one item to get people
in the door."

Say it with insult
cards. Use signage, also called insult cards, to highlight
bargain products; then arrange related, higher-margin merchandise
near low-priced items-like cookies near that gallon of
milk-to spur impulse purchases.